Technological Change in the MistInnovation Directions in the Confusing IoT Platform

Landscape

Saverio RomeoPrincipal Analyst – Beecham Research

IoT Build – 16th November 2016

The Three Waves of M2MAfter-Market Applications

Regulatory

Line Fit

• Medium/High Volume

• Embedded networking

• Low cost per unit

• Increasingly requires international coverage

• Fit with international MNOs and MVNOs

• Medium/High Volume during install

• Embedded networking

• Low cost per unit

• Favours tendering process

• Good fit for MNOs

• eCall a crossover (see note below)

• Low/Medium volume per application

• Add-on networking: retrofit

• Medium/High cost per unit

• Often requires high level of support

• Good fit for MVNOs/resellers Vending

Toll Collect

Meter Reading

eCall

OnStar/

Telematics

Handheld

Tracking

Pumps

Vineyard

Monitoring

Car Wash

Source: Beecham Research

Note: eCall in EU is now a unique crossover of Regulatory

with Line Fit characteristics

Research Approach

DATA

[+] Focusing on Sector needs - securely

[-] Not Enabling Wide Interactions

Service Enablement Services (SES)

1. Examples:

a. Remote enable/disable of devices in the field

b. Managed update of remote devices with application software

c. Storage and processing of remote device data

d. Integration with enterprise systems

2. Why focus on SES?

a. No longer appropriate to sell network airtime on its own without connectivity management (SES service): now a standard offering

b. Without SES, M2M products/services take longer and cost more to get to market

c. SES represents a new revenue opportunity

d. SES likely to become a key differentiator in M2M market

Embedded

Mobile Device

Network

Connectivity

Service

Enablement

Services

Value Added

Services

M2M Service Enablement Services (SES)

Authorisation/ AccessControl

Enterprise System Integration

Location-basedServices

Subscription Services

Identity Management

Technical Support

Connectivity Management (Lifecycle Provisioning)

Portal Service Data WarehousingContent

ManagementData

ManagementData Analysis &

Presentation

Device ManagementApplication

Development ToolsDisaster Recovery Digital Vault

Message Management

Billing Management

Device Data Security Emergency SupportApplication

ManagementPolicy

Management

SES1 – 2009-2010 around 50 services offeredfrom 25 platforms in the market place

SES2 – 2011-2012 more than services offered for a bit more than 50 platforms

Source: Beecham Research

Strong In-house SES Activities

Source: Beecham Research, SES2

During the period of SES1 and SES2 research, there were strong in-houseactivities. But, even then, scalability appeared to be an issue for those projects

IoT Applications

INTERACTION

UNDERSTANDING

CONTROL

INSIGHT

& more

DATADATA

DATA

From the single application (business purpose)

towards a context with several applications and

several datasets

Multi Connectivity Agnostic

Long Range Connections - 2020

Cellular – 65%

LPWA – 25%

Fixed – 9%

Satellite – 1%

Note: The entire set of short-range options are not here considered. Beecham Research is assessing the short-range connections.

Cellular Connections – 2015

Note: At the end of 2015, there were 262 million cellular (2G,3G,4G) connections globally

Source: Beecham Research

Source: Beecham Research

Middleware

for the

Internet of

Things or IoT

Platforms

DATADATA

DATA

The Objectives of IoT Platforms

• An IoT Platform is an intelligent layer that connect the things to the network and abstract applications from the things in order to enable the development of services.

• We want all this because we want to achieve at least three main objectives:

• flexibility (being able to deploy things in different contexts),

• usability (being able to make the user experience easy),

• and productivity (enabling service creation in order to improve efficiency, but also enabling new service development)

A Macro View of an IoT Platform

• As solutions become more complex and mission critical, platforms to support them also need to evolve.

• Need to extend managed environment to the edge.

• Becoming more challenging for enterprise users to ‘grow their own’. Expect more to want to outsource to ‘best-fit’ partner.

• Increasing importance of data management, API management and security.

• Billing is another cross-layer

segment to consider.

Rich Research and Standardisation Environment

Rich and Fragmented IoT PlatfromLandscape

IoT Platforms Different Approaches for Different Contexts

Vertical-CentricDesigning a platform for specific verticals (smart city platforms, industrial internet platforms, smart home platforms, smart health platforms)

Data Analytics-CentricData management services are the core elements. Here, there are companies with strong distributed networking background or analytics background.

Application Development- Centric

The mission is around enabling application development and application monitoring on any type of devices.

Edge Device - Centric The focus is enabling intelligence at the edge.

IoT Developers Focus Facilitating open source IoT development and open source hardware developers (SBC and microcontrollers)

Evolving M2M Platforms towards the

IoT

M2M Platform providers moving towards the IoT enriching their offer (typically device and connectivity centric) towards data management services and application development

Key Elements of IoT Platforms

• Data and connectivity management. Device discovery, authentication, management, and control;

• Context-awareness. Collecting, managing and using contextual information (event processing for example);

• Scalability. Being able to enlarge the deployment of devices, agnostically from the type of devices (importance of drivers and APIs);

• Data analytics and visualisation tools. Being able to analyse different data sources (big versus low data, real-time versus batches, high velocity of data production versus low velocity);

• Interoperability. Being flexible enough to engage with other software solutions and exogenous data sources (IT data for example);

• Security. Ensuring the security, the privacy and the integrity of the data gathered.

• Innovation enabler. Creating ecosystem of users and developers through application enablement suites.

Smart City as System of SystemsSmart City Platforms

• Some examples to watch: Living PlanIT, Toshiba Community Platform, IBM, Plat.One, Prismtech

Smart HomeSmart Home Platforms

• Some examples to watch: Marvel, Qivinoc, Smart Things, Greenwave Systems

Industrial InternetIndustrial Internet Platforms

• Some big names to watch: GE Predix, Siemens + SAP, Bosch, Telit DeviceWise, PTC• Some small companies to watch: Solair, Carriots, Prismtech, Wi-Next

Security and Data Management – Two Key Issues of Development for IoT Platforms

Source: Beecham Research Survey. Same questions in two different surveys 2014-2015

Key Areas of Development for IoTPlatforms

Security

IoT Solutions bring security complexity

IoT Solutions bring interface proliferation

Future IoT applications must break silos (Multi Sector solutions)

Increases in Internal interfacesand associated vulnerabilities

VARYING SECURITY vs THREAT LEVELS

VARYING SECURITY vs ECONOMICS

Variations between Service Sectors OR sooner, SUB SECTORS

IoT Edge Devices Growth

• 5.5bn IoT connected devices by 2020 – Beecham Research forecast• Does not include phones and general purpose devices• Faster growth than M2M to date for solutions that need installation• The Challenge: provide better security with fast growth

Key Areas of Development for IoT Platform

Data Management Services

• The low data and big data IoT will require increasing complex data management services.

• Advanced data analytics will increase become a strategic element of IoT platforms.• Data orchestration (machine-generated data and IT data) is increasingly important.• Not all big data IoT, but also low data IoT.• Increasing importance of edge analytics thought AI• Need of skills.

Searching for Business Models for IoT Platforms

• Currently, there are different business models such as: • A la carte’• Pricing Matrix• Pay Per Device• Pay Per Payload• Pay Per Traffic Exchanged• Commoditazion of certain services• SLA on security and data management services• Consultancy models• Combination of the above

But, the feasibility of any of those has to be proved yet.

Go-To-Market Strategies Key Vertical Covered

Manufacturing is of high interest for many IoT platform vendors. The focus on telcos/MNOs is limited to Cumulocity (High Interest), Plat.One (High Interest), PTC, PubNub, Davra Networks

Go-to-Market Strategies

Indirect Channels

System Integrator

Developer Community

Distributor

Device Vendor

MNO/Telcos

Solution Provider

• Solution providers and system integrators appear to be the most common go-to-market partnerships.

• Large developer community is highly desirable.

• The common approach is a mix of all of those – an ecosystem approach. Desirable, but difficult to manage.

The Developer as a Go-to-Market Enabler

Indirect Channels

Developer Community

In-house Champion

Licencing models and professional services

Subscription models

Developer/s spread the knowledge on the IoTplatform in their company

Commercial agreements between IoTplatforms and company

Building the Developer Community

Community Building Approaches

Instigating the making community (Raspberry PI, Arduino, others)

through tools (such as IoT Builder Tools)

Proposing OpenAPIs and tools for using the APIs

Gathering Developers in Physical Events

Developing Innovation Labs linked to the Organisation

Expanding through Partnerships and Acquisitions

Expanding Platforms through Acquisitions. CISCO and Jasper Wireless, Hitachi andPenthao (Lumada), Amazon and 2lemetry, PTC and ThingWorx and Axeda, Microsoftand Solair.

Expanding Platforms through Partnerships. To expand the set of services. This isparticularly used in the case of data management services (Glassbeam andThingWorx) and application development services (CISCO and Cumulocity)

Sector Expansion through Partnerships and Acquisitions. Partnering with sectorspecialised organisations is becoming critical, particularly for complex contexts suchas industrial plants (Siemens and SAP Hana, Prismtech and AdLink) and smart city(IBM Watson and Living PlanIT).

Funding Expansion through Relocation. There are several IoT platforms relocatingor opening a second office in California in order to move away from the start-upmode. The reason of that is primarily funding. Examples are: Greenwave Systems,Plat.One, Kii, and Wi-Next.

Some Emerging TrendsIoT Edge Analytics. The sophistication of analytics tools requires an increasingspecialisation and skills. There are a number of IoT analytics companies (forexample, Splunk, Glassbeam) working or aiming to working closely with IoTplatform companies.

Fluid Computing. The debate on where the intelligence should be located betweenthe edge and the cloud thrills the IoT community. There are strong cloud-orientedapproaches and more edge-oriented approached through IoT gateway models. Theidea of Fluid Computing is that both can be in place and the user does not need topreoccupy about it. The platform become fluid because its context awarenessenables it to decide if the intelligence should reside at the edge or at cloud level.

Cognitive Computing. The idea is to introduce cloud computing in the edge devicesin order to enable them to understand contexts and take actions.

Social Objects. Social networking-like capabilities to the objects in the Internet ofThings. Developing platforms that enable “friendship” and “friendly interactions”among objects.

What’s the Opportunity?

• It is not inevitable that everything will be connected

• Everyone weighs up the risks and costs versus the benefits

• If the IoT market is going to develop, then adequate security is a key enabler

• Need to Get Real about the numbers

• 20 Billion connected devices in 2020 and trillions of dollars by 2025 is not realistic

• Would require growth rates of well over 100% per annum for all parts of the market

• Cannot be implemented that fast, even if it was all purchased

• Many of these concepts will take a while to take off

• Building for low billions of connected devices – quite enough for now

Thank You

www.beechamresearch.comsromeo@beechamresearch.com

@Saverio_Romeo